Contrary diagnoses given by the People's Bank of China and the National Bureau of Statistics (NBS) on the Chinese economy revealed a lack of consensus among policy-makers about whether it is time to put on the brakes to fight inflation.

Yet, such different views might help deepen the grasp of authorities on the real picture of the national economy.

The central bank warned against looming inflation and vowed to rein in credit growth this year in its annual monetary policy report, published on Tuesday.

Meanwhile, Yao Jingyuan, spokesman and chief economist of the NBS, claimed a few days ago that the country is unlikely to see runaway inflation.

The two voices all became louder later last year as the national economy rebounded strongly from the outbreak of SARS (severe acute respiratory syndrome).

Explosive investment growth alerted banking authorities to the mounting risks of the numerous bank loans pumped into certain sectors, which were exposed to be redundant.

The central bank certainly cannot wait and see on the matter, especially when the country's consumer price index (CPI), the key gauge of inflation, began to shoot up at the end of last year.

Even without new factors driving price growth, according to the central bank's report, the CPI will move to 2.2 percent by itself as last year's price hikes spill over well into this year. The index rose by 1.2 percent in 2003.

For the health of the national economy, early efforts to slow lending growth for a soft landing appears much more desirable to the central bank than braking hard when inflationary pressures become almost uncontrollable.

Nevertheless, some other policy-makers were also justified to worry that such anti-inflation measures might compromise the growth momentum the national economy badly needs to move on.

China just stepped out of deflation which had been lingering since 1997. The SARS outbreak also made an extra push necessary for the national economy to survive its fallout.

To keep the economy firing on all cylinders for a while before it can land solidly on its feet is definitely a valid concern.

Besides, it is also correct to cite oversupply in the domestic market as a reason against panicking over looming inflation.

As the Chinese economy is increasingly integrated into the world's, which has not completely shrugged off its own deflationary pressures, the country's inflation rate is unlikely to rise too much alone.

Undoubtedly, both of the opposite views are based on analysis of a part of the truth about the country's economy.

Intensified argument indicates that the authorities have resisted the temptation to come to any conclusion before the issue has been thoroughly studied.

As the country's CPI further goes up, time left for decision-making is shrinking.

A sense of urgency is needed. But there is no hurry in prescribing before a comprehensive diagnosis is done.

(China Daily February 27, 2004)